Abstract. Solar variability is controlled by the internal dynamo which is a nonlinear system. We develop a physical-statistical method for forecasting solar activity that takes into account the non-linear character of the solar dynamo. The method is based on the generally accepted mechanisms of the dynamo and on recently found systematic properties of the long-term solar variability. The amplitude modulation of the Schwabe cycle in the dynamo’s magnetic field components can be decomposed in an invariant transition level and three types of oscillations around it. The regularities that we observe in the behaviour of these oscillations during the last millennium enable us to forecast solar activity. We find that the system is presently undergoing a transition from the recent Grand Maximum to another regime. This transition started in 2000 and it is expected to end around the maximum of cycle 24, foreseen for 2014, with a maximum sunspot number Rmax = 68 ± 17. At that time a period of lower solar activity will start. That period will be one of regular oscillations, as occurred between 1730 and 1923. The first of these oscillations may even turn out to be as strongly negative as around 1810, in which case a short Grand Minimum similar to the Dalton one might develop. This moderate to low-activity episode is expected to last for at least one Gleissberg cycle (60 - 100 years).

"Anyone who goes around and says that carbon dioxide is responsible for most of the warming of the 20th century hasn't look at the basic numbers."Patrick Michaels - Ph.D. Ecological Climatology, Professor of Environmental Sciences, U. of Virginia

“We have 25 or so years invested in the work. Why should I make the data available to you, when your aim is to try and find something wrong with it.”Phil Jones, Professor in the School of Environmental Sciences at University of East Anglia, to Steve McIntyre